Group in New York Arrested in Alleged ATM Cybercrime

By

Chad Bray

Updated May 9, 2013 7:26 p.m. ET

Jose Familia Reyes allegedly withdrew so much money illegally from ATMs that he needed a backpack.

Seven people were arrested in the U.S., accused of operating the New York cell of what prosecutors say was a network that stole $45 million from ATMs in 27 countries all over the globe. Joel Schectman reports on Lunch Break. Photo: AP.

He carried it from automated-teller machines on Manhattan's Upper West Side to ATMs in the Chelsea neighborhood, and it grew heavier and heavier as he filled it with $20 bills, according to prosecutors. His alleged withdrawals were part of a theft that drained New York City ATMs of about $2.4 million in just 24 hours in February, making it the second-largest cash heist of any kind in the city's history.

Related

Federal prosecutors in Brooklyn, N.Y., filed charges Thursday against Mr. Reyes and seven others, accusing them of taking part in a high-tech scheme to steal money from multiple ATMs simultaneously, using stolen prepaid debit-card numbers. The eight were part of a wider plot to steal tens of millions of dollars from locations across the globe, prosecutors allege.

The people charged mostly lived around Yonkers, N.Y., a city 2 miles north of Manhattan, but were members of a larger group that spanned five continents, prosecutors allege. Two cyberattacks in December and February involved ATM withdrawals in more than 20 countries, with one attack consisting of 36,000 ATM transactions over a 10-hour period, prosecutors said.

Lawyers for Mr. Reyes and the other people charged couldn't be located for comment Thursday.

No individual bank accounts were compromised as part of the alleged scheme. To carry out the theft, the cybercrime group allegedly hacked into computer networks for processors of prepaid debit cards provided by the National Bank of Ras Al-Khaimah PSC in the United Arab Emirates and the Bank of Muscat in Oman, prosecutors said. The cybercriminals sharply increased the available balances for those cards and eliminated withdrawal limits on the cards, prosecutors said.

When it came time to withdraw the money, they would text or email PINs for the stolen cards to confederates around the world, who would execute coordinated ATM transactions at the same time, prosecutors said. In one instance, they allegedly used 12 stolen prepaid debit account numbers to withdraw about $40 million.

The cybercriminals would monitor the withdrawals in real-time from within the credit-card processing firms' computer networks, prosecutors said.

In order to conceal the proceeds, the money often was used to purchase luxury goods, such as automobiles and expensive watches, said prosecutors, who have seized tens of thousands of dollars in cash, Rolex watches and a Mercedes G63 AMG and are in the process of seizing a Porsche Panamera.

"This was indeed the largest theft of this type that we have yet seen," said Loretta Lynch, the U.S. Attorney in Brooklyn, N.Y. "This was a 21st century bank heist that reached through the Internet to span the globe. But, instead of guns and masks, this cybercrime organization used laptops and malware."

Citing the continuing investigation, Ms. Lynch declined to say where the organizers of the world-wide scheme are believed to be. She said they were looking into individuals in Asia and Europe.

The money was split between the "cashing crews" who made the withdrawals and the organizers of the scheme, prosecutors said. The cashing crews kept about 20% of the stolen money, prosecutors said.

The New York City theft ranked behind the theft of $5 million from John F. Kennedy International Airport after the money had arrived on a Lufthansa flight in 1978.

Seven people living in the Yonkers area were arrested and allegedly were part of a New York cell of the organization, according to prosecutors.

An eighth person was charged but is believed to have been murdered in the Dominican Republic in April, according to prosecutors.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.